Online advertising may be an important source of revenue for enterprises engaged in electronic commerce. The advent of search engines may have resulted in an increase in the use of sponsored search, or paid search, by advertisers. Sponsored search may be an arrangement where companies and/or individuals pay a service provider for placement of their advertisement listing. The advertisement listing may be placed in a search result set generated by the service provider's search engine or may be placed on a page of a partner of the service provider, e.g., a blog. An advertiser may place bids for one or more keywords within a search term bidding marketplace that may work in conjunction with one or more search engines. An advertiser may bid on keywords that may indicate an interest in the products, services, information, etc. being advertised in the advertisement. The amount an advertiser may bid on the keywords may indicate the cost the advertiser may be willing to pay for placement of the advertisement.
A user may submit a query comprising one or more keywords to a search engine and the search engine may produce a result set comprising one or more listings that may fall within the scope of the query, including sponsored search listings. The search engine may use the keywords, as well as other features such as user and advertiser information, to select sponsored search listings for inclusion in the result set. The user may generate a lead for an advertiser when the user selects the sponsored listing of the advertiser, such as by clicking on the advertisement.
Search engines may strive to maintain an increasing supply of users to deliver valuable leads to advertisers and advertisers, in turn, may demand a growing supply of leads from search engines. This may result in growth of search engine usage and online advertising budgets. Search engines may retain and increase their supply of users by providing relevant web search results and advertising. Advertisers may increase their demand of leads as lead quality and targeting improve. A marketplace therefore may exist that includes a given keyword, the set of one or more users who may provide search queries comprising the keyword over a given period of time (“lead supply”) and the advertisers who may compete for leads (or clicks) for the given keyword. Search engines or other advertisement providers may use the above-described term bidding marketplace, which is a form of an auction, to allocate leads to advertisers.
In a “dense” marketplace, advertiser demand may exceed the supply of leads. The auction may be designed such that advertisers who are most relevant to the keyword, and/or value the lead the most, may place the highest bid on the keyword. In “shallow” or “sparse” marketplaces, advertiser demand may not exceed the supply of leads. A shallow marketplace may have limited leads because the marketplace may be characterized by multiple keyword phrases, as well as keywords that may be obscure and/or may have a very narrow context or intent. Since there may be only a small number of advertisers bidding for these keywords, the average cost per click for a given lead may be generally low. Advertisers may bombard search engines with low bids for a large number of such keywords to capture opportunities in shallow marketplaces. The imbalances of supply and demand may lead to inadequate overall relevance to users and a lack of competition among advertisers, ultimately resulting in a decrease in revenue to the service provider.
Furthermore the term-bidding marketplace may require advertisers to predict keywords or queries that may be searched for by users. If a user searches for a keyword or query which has not been bid on by any advertisers, the search engine may not display any advertisements to the user. If a search results page is displayed to a user with no advertisements, there may be little likelihood of leads for the advertisers and revenue for the search engine provider.